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More cash-on-delivery transactions led to increase in order returns: report

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An increase in Cash-on-Delivery (COD) transactions led to a slight increase in order returns, which stood at 10.4 per cent in FY23, up from 9.8 per cent in FY22, according to a report from Unicommerce.

In FY23, the return rate for COD orders stood at 20.9 per cent, a slight uptick from the 19.3 per cent recorded in FY22. While returns on prepaid orders exhibited a marginal increase, rising from 5.6 per cent in FY22 to 5.8 per cent in FY23. Moreover, returns on marketplace orders stood at 26.3 per cent in FY23, compared to 24.2 per cent in FY22.

COD orders account for more than 60 per cent, while prepaid orders account for 39.2 per cent of the overall returns.

Strategic approach

Additionally, the report stated that the lower return rate on prepaid orders has prompted companies to incentivise such orders, reflecting a strategic approach to minimise returns and enhancing customer satisfaction.

India’s e-commerce industry has recorded a 26.2 per cent YoY order volume growth in FY23, supported by a 23.5 per cent rise in annual GMV (Gross Merchandise Volume) compared to the previous financial year.

“E-commerce is no longer just an additional sales channel; it has woven itself into the fabric of modern business. Companies are harnessing digital platforms not only to sell but also to promote and engage with consumers. We are transitioning into a true omnichannel era where brands and consumers seamlessly interact and transact across a multitude of online and offline touchpoints,” said Kapil Makhija, CEO of Unicommerce.

Robust growth

As a result of the inclusion of newer brands that offer economical products across the segment, the e-commerce space has witnessed robust growth in the electronic products and peripherals segment, with a notable 46.8 per cent YoY order volume growth and GMV growth of 20.6 per cent in FY 2023.

Similarly, the eyewear and accessories segment recorded a growth of 44.6 per cent YoY order volume during FY23, while the GMV rose by 52.8 per cent annually during the same period as compared to the last financial year.

The fashion and accessories segment witnessed YoY order volume growth of 19.5 per cent along with a rise in its GMV of 15.3 per cent during FY23. While the beauty and personal care segment recorded a reasonable 26.6 per cent YoY order volume growth and an 18.9 per cent YoY growth in GMV during FY-2023.

Omnichannel strategy

The report states a rising consumer inclination towards online shopping and provides a rationale for the rapid adoption of omnichannel strategies by brands to cater to the rising demand across both physical and digital channels.

As the demand for omnichannel strategies rises, new-age brands have integrated this approach into their business models, while traditional enterprises are adopting advanced technology to establish a cohesive framework that serves both their physical and online sales channels.

The number of online orders shipped from stores reported a 44.6 per cent growth during FY23 compared to the previous financial year.

Stores continue to adopt omnichannel technology to serve customers better and enhance their shopping experience. During FY23, the number of stores that implemented omnichannel operations rose by 58.4 per cent compared to the last financial year.

Unicommerce, an e-commerce enablement SaaS platform, launched the third edition of its annual trends report, the India E-commerce Index 2023.



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